India's Hydrocarbon Outlook – 2022-2023

19 DGH: 3 DECADES OF UNLOCKING INDIA'S HYDROCARBON POTENTIAL DGH's funding is obtained through OIDB (Oil Industry Development Board) grants, and each year DGH presents its estimate for the required funds and seeks approval from the administrative council. In the past thirty years, ever since its creation under the purview of the Ministry of Petroleum and Natural Gas, the Directorate General of Hydrocarbons (DGH) has transformed into a formidable entity, serving as a dynamic force that catalyzes and facilitates the optimal growth and progress of the petroleum industry's upstream sector. A Decade-by-Decade Look at the Indian Petroleum Sector's Rapid Evolution…since the formation of DGH. the 1990s The petroleum sector in India was initially run by two national oil companies, Oil & Natural Gas Corporation and Oil India. In the 70s and 80s, private sector involvement was encouraged through invitations for foreign oil companies to explore, particularly in offshore areas. The liberalization policy of 1991 opened the sector further, with both domestic and foreign private companies allowed to explore sedimentary basins. This led to the offering of exploration blocks and small-medium discovered fields through bidding rounds to private and joint venture companies. The increased activities prompted the need for a regulatory body and thus, the Government of India established the Directorate General of Hydrocarbons in April 1993 to oversee exploration and development activities. Between 1980 and 1995, 28 exploration blocks were awarded to private companies, including ONGC and OIL. In 1991-1993, the government signed contracts for 29 discovered fields under the Pre-NLEP Discovered Field Rounds. In 1993, blocks for geophysical and other surveys to update the information on hydrocarbon potential of India's unexplored sedimentary basins were offered. Following the completion of these surveys, the blocks were scheduled to be made available for further exploration in subsequent rounds. The government also instigated strategic reforms to disseminate exploration undertakings across the nation. Frontier basins and Deepwater regions, which had remained uncharted or insufficiently surveyed for a considerable time due to geological ambiguities, technological hurdles, complex logistics, and high risks, were targeted for exploration. The exploration bidding rounds that were previously launched continued with the provision of more blocks from non-producing basins. As the response of private firms to these high-risk rating blocks was not encouraging, the government introduced the New Exploration Licensing Policy (NELP) in 1997. The policy provided attractive fiscal terms, not only to promote, expand, and expedite exploration activities across most sedimentary areas, including deep offshore, but also to create a level playing field for both private and national oil companies (NOCs).The government has also recognized the potential of coal bed methane and formulated the CBM Policy in 1997. The NELP Policy was operationalized in 1999. In the year 2000, 24 Production Sharing Contracts were inked under the NELP-I round. The upstream hydrocarbon industry in the country underwent a momentous transformation with the introduction of the New Exploration Licensing Policy in 2000.